The real estate market saw a significant decline in sales of previously owned homes in June, with a 5.4% drop compared to May. This trend continued from the previous year, with sales being 5.4% lower than in June of the previous year. This slowdown in sales can be attributed to a shift from a seller’s market to a buyer’s market, according to Lawrence Yun, chief economist for the Realtors. Homes are now spending more time on the market, and sellers are receiving fewer offers. This change has been influenced by factors such as increased demand for home inspections and appraisals, as well as a rise in inventory on a national level.
Inventory levels in the real estate market have seen a notable increase, jumping by 23.4% from the previous year to reach 1.32 million units by the end of June. Despite this surge in inventory, it still only translates to a 4.1-month supply, falling short of the desired six-month supply considered balanced between buyers and sellers. The average time a home spends on the market has also increased, reaching 22 days compared to 18 days a year ago. The median price of existing homes sold in June hit a new all-time high of $426,900, marking a 4.1% increase from the previous year. Notably, the higher end of the market has shown more strength, with sales of homes priced over $1 million seeing gains, while lower-priced homes have experienced a decline in sales.
Buyers in the real estate market have been affected by the current dynamics, with higher-end buyers continuing to dominate sales. The share of all-cash sales increased to 28%, up from 26% in the previous year, while investors’ share of sales decreased to 16%, down from 18% a year ago. However, the influx of new listings in the lower price range has impacted the overall median listing price, which is being held down by the increase in smaller and lower-priced listings. Despite the high national sales price, new listing prices are lower, with a notable surge in listings priced between $200k to $350k, showing a 50% increase compared to the previous year.
Looking ahead, Lawrence Yun predicts that if the trend of increasing inventory continues, it could lead to one of two outcomes. Either home sales will rise as buyers take advantage of the increased supply, or if prices do not rise, there may be downward pressure on prices in the market. The coming months will be crucial in determining whether the current market conditions persist or if there will be further shifts in the real estate landscape.